Next Fifteen Communications Grp PLC – NFC – Final Results

Next Fifteen Communications Grp PLC – NFC – Final Results

Next 15, the digital communications group, today announces its final results for the year ended 31 January 2021.

Financial results for the year to 31 January 2021

Year ended 31
January 2021
£m

Year ended 31
January 2020
£m

% change year on year

Adjusted results1

Net revenue

266.9

248.5

7%

Operating profit after interest on finance lease liabilities

49.5

40.9

21%

Operating profit margin

18.5%

16.4%

Profit before tax

49.1

40.2

22%

Diluted earnings per share (p)

40.7p

34.8p

17%

Net cash generated from operations

72.9

49.5

47%

Statutory results

Revenue

323.7

300.7

8%

Operating profit

13.7

19.4

(29)%

(Loss)/profit before tax

(1.3)

5.6

(123)%

Diluted (loss)/earnings per share (p)

(5.3)p

2.5p

(312)%

1 Adjusted results have been presented to provide additional information that may be useful to shareholders to understand the performance of the business by facilitating comparability both year on year and with industry peers. Adjusted results are reconciled to statutory results below and within notes 2, 3 and 8.

Highlights

  • Group net revenue growth of 7% to £266.9m and statutory revenue growth of 8%, aided by acquisitions
  • Adjusted profit before tax up 22% to £49.1m
  • Adjusted diluted earnings per share increased by 17% to 40.7p
  • Net cash generated from operations increased by 47% to £72.9m
  • Strong balance sheet with net cash of £14.0m at 31 January 2021 (2020: net debt of £9.3m)
  • Expanded briefs from a number of clients including Salesforce, IBM and Amazon
  • Material step into innovation consulting through the acquisition of Mach49 in August 2020 and the acquisition of CRE in July brought digital optimisation skillset into the Group, with both being earnings accretive in the year
  • Following a review of the property portfolio in the light of plans to operate more flexible home working, a £10m property impairment charge has been booked due to surplus office space which resulted in a statutory loss before tax of £1.3m. This should yield approximately £5m in annualised savings
  • Reinstatement of the dividend policy with a final dividend proposed for the year ended 31 January 2021 of 7p per ordinary share
  • Post year end commitment to repay UK Government furlough support

Current trading and outlook

  • The Group has made a strong start to the new financial year and is currently trading ahead of management expectations
  • The Group has recently announced the acquisition of Shopper Media Group Ltd which specialises in commerce marketing activation, connecting retailers and brands with shoppers at the point of purchase both online and in-store

Commenting on the results, Chairman of Next 15, Penny Ladkin-Brand said:

In a year like no other, these are excellent results. As the first effects of the pandemic took hold at the start of the financial year, Tim said that he wanted Next 15 to come out of this year as a stronger business. He and the executive team have worked tirelessly in order to achieve that outcome. They have changed the way we operate, rethinking the offering to customers, how the businesses in the Group interact and how we interact with our people. Most importantly, the past year has shown that our people have the character to handle challenges that are thrown at them. This resilience displayed by our people doesn’t appear on our balance sheet but it has proven to be an invaluable asset. We are grateful and proud of all the people in the Group for their efforts during the year to deliver these results.

Looking to the year ahead, the Board is optimistic about the prospects for the Group, despite the continued impact of Covid-19 on the economy. Covid-19 tested our business model but it also tested the character of the team that leads Next 15 and the people that work for the Group across the world. The Board remains confident of the Group’s underlying prospects. We believe we have the quality of people, the strategy and the financial strength to continue to outperform our marketplace.

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